Chancery Court approves sale of TransPerfect

Shirley Shawe works to end deadlock with TransPerfect.
Jason Minto/The News Journal

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TransPerfect CEO Phil Shawe stands in the company's New York headquarters in July. The Delaware Court of Chancery approved the sale of the company to Shawe Thursday.(Photo: SUCHAT PEDERSON/THE NEWS JOURNAL)Buy Photo

The long TransPerfect saga in the state of Delaware may finally be over.

Thursday morning, Chancellor Andre Bouchard approved the sale of the company in Chancery Court to Phil Shawe, the company confirmed.

In November, a Delaware court-appointed custodian of the New York-based translation company said in a letter to employees that Shawe and Liz Elting, co-CEOs and ex-fiancés, had settled on a sale agreement that permitted Shawe to acquire shares of the company owned by Elting.

The sale agreement calls for a New York entity owned by Shawe, PRS Capital LLC to purchase all of Elting’s shares of TransPerfect common stock for $385 million cash, subject to certain adjustments, according to court documents. The transaction is estimated to yield Elting approximately $287.2 million in after-tax net proceeds, documents say.

"My mother and I are very pleased that the Court approved my purchase of the remaining shares of TransPerfect, and thus ensured that our successful business model will remain intact," Shawe said in an emailed statement.

"I look forward to putting the uncertainty of litigation behind us, and to working with our existing management team to continue the unparalleled track-record of growth and profitability TransPerfect has enjoyed for over 25 years."

The sale agreement Elting is required to indemnify PRS Capital LLC, its affiliates (including Shawe), and their representatives only in the event of a breach of certain “fundamental” representations made by Elting or any covenant to be performed by Elting after the closing of the transaction, according to court documents.

The battle for ownership, which at times turned nasty and personal, brought protests and political threats to Delaware despite the company not housing any facilities or employees in the state. The case was heard in Delaware because TransPerfect is incorporated in the state.

The ordeal inspired a bill, sponsored by Sen. Colin Bonini, in the 2017 legislative session that would impose a three-year waiting period before the Chancery Court can sell a private company. It did not receive a vote from the full Senate.

The TransPerfect case was believed to be the first time a Delaware judge had ordered the sale of a successful company. Custodian appointments are usually reserved for businesses that are dissolving or facing bankruptcy.

Bouchard in 2016 ordered the company be put up for auction and sold to the highest bidder. Prior to the ruling, Elting, who owned 50 percent of the company, had filed a lawsuit asking for a dissolution.

Bouchard, in his 2016 ruling, concluded the ownership fight created an atmosphere of "complete and utter dysfunction."